By Chris Munro

Jan 30 - (The Insurer) - Arthur J Gallagher’s wholesale and specialty business and Gallagher Re saw collective organic growth accelerate by one point from the previous quarter to 9 percent in Q4 2024, with CEO Pat Gallagher revealing that the reinsurance broker secured “some nice new business wins” at 1 January.

As Doug Howell, AJG’s chief financial officer, explained during a call with analysts to discuss the broker’s fourth quarter and full year 2024 earnings, UK specialty booked organic growth of around 7 percent in Q4 2024, while US wholesale operation Risk Placement Services’ was “maybe” 10 percent.

“[Reinsurance] is pretty small in the quarter. It's just not a big quarter for us,” said Howell.

In the third quarter of 2024, Gallagher Re and wholesaler Risk Placement Services combined recorded 8 percent organic growth.

Reflecting on the reinsurance renewals at the beginning of the year, Gallagher, who also serves as AJG’s chairman, said Gallagher Re “had a fantastic 1.1” that included “some nice new business wins”.

Gallagher Re, he said, “should continue to excel in this environment”.

On the renewals themselves, Gallagher described them as “orderly” and reflective of an environment that generally favoured buyers.

“Growing demand from property cat cover was met with sufficient reinsurance capacity despite 2024 being an elevated year with more than $150bn of estimated insured natural catastrophe losses,” he said.

“This resulted in property price declines that were greater at the top end of reinsurance towers.

“And similarly to the January 2024, renewals reinsurers continued to exercise discipline on terms and did not revert to attachment points that expose them to greater frequency.

“Reinsurance buyers of specialty coverages saw modest price declines across many lines of coverage, but again, no softening in terms and conditions,” the executive added.

In casualty reinsurance, Gallagher said while there was adequate capacity, reinsurers remain cautious on US risks owing to elevated loss cost trends and potential reserving.

“Looking forward, wildfire losses and casualty reserve increases seem to be the stories here in January, and time will tell how each of these ultimately [affect] the market,” he said.

Q1 global primary P&C renewal premium increases rise

In the primary P&C market, Gallagher said overall the global industry continues to grow.

In Q4 2024, renewal premium increases – which comprise both rate and exposure combined – were consistent with the past two quarters, Gallagher said.

“Thus far in January, renewal premium increases are ticking slightly higher than fourth quarter and are above 5 percent, driven by increases in casualty lines like umbrella and commercial auto,” the executive noted.

Breaking down fourth quarter global renewal premium changes by product line, Gallagher said property and professional lines were about flat.

Workers' compensation was up 1 percent, while general liability increased 4 percent.

Commercial auto went up 9 percent, umbrella increased 10 percent, and personal lines rose 9 percent.

“We continue to see increases across most lines and geographies. Carriers are behaving rationally and pushing for increases where it's needed to generate an acceptable underwriting profit,” Gallagher said.

“It's a great market for us to operate in because we can further differentiate ourselves with our leading tools, data and expertise.

“Remember, our job as brokers is to help clients find the best coverage that fits their budget while mitigating price increases.

“We're becoming more successful securing lower pricing for our property customers, especially cat-exposed property, which enables them to buy more limit or reduce their deductibles resulting in more coverage for the same spend,” Gallagher stated.